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Digital Investments Bearing Fruit for B2C Companies

A new survey reveals that disruption in the retail, travel, and health care sectors is driving improvements in customer insights and work patterns.

While few companies remain untouched by the disruption of the major postdigital forces—mobile, social business, data analytics and cloud computing—the effects vary dramatically by sector and function, according to a Deloitte Consulting LLP survey.¹

For example, retailers facing relentless competitive pressure and consumer demand for digital shopping options have responded aggressively. In contrast, healthcare providers and payers, insulated to some extent by regulatory and budget constraints, have taken a more cautious approach.

“These forces affect each industry differently. In some, the disruptive impact is already undeniable and companies are taking decisive action and realizing benefits,” says Suketu Gandhi. “In others, the effects are still emerging and companies are moving more cautiously as they search for a compelling business case.”

Insight into Customer Preferences

Companies that have invested in postdigital pilot programs and have implemented projects report an improvement in their understanding of customer preferences (see Figure 1). In fact, 73 percent report moderate to significant improvements in customer insights, which, says Gandhi, can enhance strategic efforts more broadly. “The survey found a correlation between improvements in customer preference insight and new product development,” he notes.

Figure 1: Digital Investments Correlate with Improved Insights

Source: Deloitte Consulting LLP

Work Patterns and Decision-Making

Postdigital forces are already affecting work patterns throughout the surveyed industries. “Respondents report they are seeing improvements in timely decision-making, work location independence, and work team collaboration,” says Gandhi.

Customer service has been most affected, with 78 percent of respondents whose companies have funded postdigital pilot projects reporting moderate to major changes in work patterns (see Figure 2). Similarly, 74 percent of these respondents report moderate to major changes in their approach to marketing. Human resources has been slower to apply postdigital forces although that is likely to change, according to Gandhi. “Anecdotally, we know that pressure is mounting on HR to collaborate more effectively with other enterprise functions. Postdigital forces may support this change by reshaping many of the procedural and operational dimensions of human capital management.”

Figure 2: Changes in Customer Service Work Patterns

Source: Deloitte Consulting LLP

Survey respondents also report improvements in timely decision-making, work location independence, and collaboration. For example, 65 percent of companies investing in postdigital forces report moderate to significant improvement in timely decision-making in their work teams. Another 61 percent report moderate to significant improvements in work location flexibility and 60 percent report comparable levels of improvement in collaboration among work team members.

Barriers to Implementation

While there are signs that postdigital initiatives are delivering positive results, many respondents agree that adopting postdigital technologies poses challenges. In fact, survey findings suggest that implementation complexity is currently the biggest barrier to postdigital success (see Figure 3).

In each industry surveyed, more than a third of respondents (34 to 47 percent) report implementation complexity as a barrier—making it the most commonly reported barrier by a wide margin. Only about 12 percent of respondents across industries see organizational resistance as a barrier.

Figure 3: Implementation Hurdles by Sector

Source: Deloitte Consulting LLP

Roughly 29 percent of travel/hospitality/leisure companies indicated that implementing the disruptive forces is not a business priority, as compared to just 16 percent in the retail and health care sectors.

Moreover, large companies—those reporting $5 billion or more in gross revenues—comprise only 14 percent of the respondents who say the disruptive forces are not a business priority or that no clear benefit of the disruptive forces is perceived. Many smaller companies may be overwhelmed by the complexity of the disruptive forces and have yet to fully grasp their impact.

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“These survey findings suggest that organizations are collectively developing a clear sense that the disruptive postdigital forces need to be addressed,” concludes Gandhi. “But they aren’t always sure how to go about it. To chart a successful course, each company will need powerful leaders who can drive disruption, even in the face of considerable risk. There’s no denying the opportunity—or the complexity—that comes with this challenge. ”

¹ Deloitte Consulting LLP surveyed 87 executives in the retail, travel/hospitality/leisure, and healthcare sectors to gain insight into the effects postdigital forces are having on their companies. Of the companies surveyed, 50 percent have annual gross revenues of $1.2 billion or more; 25 percent report gross revenues of $5 billion or more. Roughly half of the companies surveyed have more than 25,000 employees and 43 percent have operations in more than 10 countries.

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